GE’s Immelt Keeps Takeover Focus on Deals Up to $3 Billion
By Tim Catts - Mar 9, 2012 4:22 PM ET
General Electric Co. (GE) will focus this year on dividend increases and making acquisitions of as much as $3 billion to reward shareholders in a “continuously unstable”global economy, Chief Executive Officer Jeffrey Immelt said.
“Don’t look for any big deals in 2012,” Immelt wrote in his annual letter to shareholders. Keeping purchases in a range of $1 billion to $3 billion and in familiar fields “improves our chance for success,” he wrote.
GE is digesting $11 billion in energy-related acquisitions completed in 2011, including Dresser Inc. (DRC) and Lineage Power Holdings Inc. For 2012, the Fairfield, Connecticut-based company is emphasizing international markets, seeking to boost sales in faster-growing, resource-rich countries from China to Australia to Peru by 15 percent to about $40 billion, Immelt wrote.
“I would argue that when the environment is continuously unstable, it is no longer volatile,” wrote Immelt, 56.“Rather, we have entered a new economic era.”
Sales outside the U.S. were a highlight of GE’s March 7 presentation to investors in Rio de Janeiro. Vice Chairman John Rice cited China, Australia and Peru as being among the so-called growth markets that GE projects will account for half its industrial revenue by 2020.
Raising GE’s dividend is “one of our top priorities,”Immelt wrote. The company has increased its quarterly payout, now at 17 cents a share, four times since July 2010.
In 2009, GE cut the dividend to 10 cents from 31 cents, the first reduction since the Great Depression, as the global recession and credit crunch sapped profit at its finance unit and threatened the company’s credit rating.
The shares rose less than 0.1 percent to $19.04 at the close in New York. It was GE’s third straight daily gain.
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